Central Banks in Abundance

December 10, 2015

Central Banks in Abundance:

“NZD Official Cash Rate (Cut from 2.75% to 2.50% as expected)”

NZD/USD 15 Minute:
151210_nzdusd_15minute
Click on chart to see a larger view.

So with the Kiwi rallying, we again see the phenomenon we seem to now be calling a ‘hawkish rate cut’. With the RBNZ ‘expecting to reach inflation goals at current rate settings’, the market has interpreted Wheeler as not looking to lower rates again any time soon and duly obliged with a rally.

Looking forward, we have the Swiss Libor Rate and SNB Monetary Policy Assessment on the Forex calendar later this evening. With last week’s ECB decision not having any major negative effect on the CHF, markets are not expecting a cut to the ‐0.75% deposit rate which has stood since January of 2015.

I wanted to bring up the Technical Analysis post in which we talked about the Swissy coming back to its Pre-SNB Floor Level.

USD/CHF Daily:
151210_usdchf_daily
Click on chart to see a larger view.

“The market will always take advantage of the crowds.”

Price gave a juicy fake-out above resistance before the USD squeeze really set in and we now head back to trend line support. Write that statement on the wall above your trading screen and don’t forget it.

Finally we turn briefly to Indices, as we head into today’s FTSE chart of the day, with a quick look at the S&P.

SP500 Daily:
151210_sp500_daily
Click on chart to see a larger view.

With stocks too giving away some of their gains ahead of the expected December Fed hike, the SP500 has rejected off short term resistance and carried on its decline from there. I’ve left that major weekly trend line on the chart even though price has chopped through it recently because as we’ve seen before, these major lines can essentially be re-activated at any time.

Stay safe out there!

———

On the Calendar Thursday:
NZD Official Cash Rate (Cut from 2.75% to 2.50% as expected)
NZD RBNZ Rate Statement (Less Dovish)
NZD RBNZ Press Conference
NZD RBNZ Gov Wheeler Speaks
AUD Employment Change
AUD Unemployment Rate

CHF Libor Rate
CHF SNB Monetary Policy Assessment
CHF SNB Press Conference
GBP MPC Official Bank Rate Votes
GBP Monetary Policy Summary
GBP Official Bank Rate

USD Unemployment Claims

———-

Chart of the Day:
With the SP500 falling off resistance, across the Atlantic the FTSE100 has seen similar weakness set in but a confluence of support has caught my eye.

FTSE100 Daily:
151210_ftse100_daily
Click on chart to see a larger view.

The daily chart shows the clean bullish channel that UK stocks have been trading in over the last few months, respecting both the lower and upper bands of the range.

FTSE100 4 Hourly:
151210_ftse100_4hourly
Click on chart to see a larger view.

Zooming into the 4 hour chart, we can see the potentially juicy area of support that formed at the daily range bottom.

Do you see opportunity going with or fading momentum in the FTSE100?

Dane Williams – @VantageFX

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